AT&T director buys over $1M worth of shares


AT&T (NYSE:T) director and Burlington Northern Santa Fe CEO Matthew K. Rose discloses he bought 30K shares on Thursday for $34.65 apiece, or a total cost of $1.04M.

Rose's vote of confidence follows the July purchase of 1K shares by director/KeyCorp CEO Beth E. Mooney, and 10K shares by director/ex-Alltel CEO Scott. T. Ford.

AT&T is currently in the middle of a fairly narrow 52-week range. Shares have underperformed the S&P 500 by a large margin over the last 18 months amid concerns about tough wireless competition/price pressure. The dividend yield stands at 5.3%.

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Comments (21)
  • richjoy403
    , contributor
    Comments (13338) | Send Message
     
    I certainly hope Rose put his insider information to good use...I bought (somewhat fewer) shares the same day at a better price ($34.26).
    11 Aug 2014, 06:58 PM Reply Like
  • Rudester
    , contributor
    Comments (3323) | Send Message
     
    What does Rose know that we don't?

     

    I smell something and it ain't roses.
    11 Aug 2014, 07:18 PM Reply Like
  • richjoy403
    , contributor
    Comments (13338) | Send Message
     
    Rudester -- Don't be coy...tell us what it is you smell!
    11 Aug 2014, 07:22 PM Reply Like
  • watermark302
    , contributor
    Comments (386) | Send Message
     
    Smells are likely limited to something invisible in that bag on his head
    11 Aug 2014, 07:33 PM Reply Like
  • Rudester
    , contributor
    Comments (3323) | Send Message
     
    Richjoy,

     

    A director doesn't put down $1M of their cash to make a statement about T being undervalued. It's not in a director's job description. A Chairman or CEO might make that statement but not a director.

     

    With the ever possible increase in interest rates, T's bond like behavior would take a hit when interest rates rise. This guy knows something which leads him to believe his $1M will be safe and or will grow substantially in short order. At least that is my speculation.
    11 Aug 2014, 07:42 PM Reply Like
  • CapeCapMgmt
    , contributor
    Comments (1782) | Send Message
     
    Rudester, pass the cigars and the Johnnie Walker Black......Are you holdin' out on us??? :(
    11 Aug 2014, 08:26 PM Reply Like
  • Yankeeworld3
    , contributor
    Comments (111) | Send Message
     
    I'm pretty sure he got preferred shares with a nice dividend. Either way, I'm happy to see the purchase and will stick w/my shares.
    11 Aug 2014, 08:15 PM Reply Like
  • scn2k
    , contributor
    Comments (18) | Send Message
     
    This director is a high net worth individual. What's the downside potential of AT&T?At most, say, 20%? A loss of $200K would hardly even be noticeable to someone whose 5-year compensation (alone) was $150 million. But we can still give the man credit for putting more than a completely trivial amount of his own money in the company he directs.
    11 Aug 2014, 08:35 PM Reply Like
  • Halfatuna@aol.com
    , contributor
    Comments (22) | Send Message
     
    I also bought some T shares ,the div is divine,however the trading range is narrow..
    11 Aug 2014, 09:50 PM Reply Like
  • patient trader
    , contributor
    Comments (5) | Send Message
     
    As a long term holder, always nice to hear,,,not sure why they r outright buyers, I'm sure they have an internal stock purchase , or 401 k,,,if so they are adding more that even disclosed.
    11 Aug 2014, 09:50 PM Reply Like
  • sethmcs
    , contributor
    Comments (3531) | Send Message
     
    I love it when insiders buy stock at a price substantially above my basis. It give me a warm and fuzzy feeling.
    11 Aug 2014, 10:01 PM Reply Like
  • Rock Island Express
    , contributor
    Comments (85) | Send Message
     
    Some directors are just competitive - you bought 10K shares, watch me buy 30K shares :-)
    11 Aug 2014, 10:42 PM Reply Like
  • peter doyle
    , contributor
    Comments (23) | Send Message
     
    For you seniors out there... A 5% div growing 2% a year will deliver more $ rather they are reinvested or not, than a 3% div growing 7% a year or a 2.5% growing 10% per year for a period of Over fifteen years!
    11 Aug 2014, 11:30 PM Reply Like
  • richjoy403
    , contributor
    Comments (13338) | Send Message
     
    For all you seniors out there -- Dividend projections can look very attractive, and not be worth a tinkers dam in real life.

     

    There are at least 3 risks to counting chicks before they hatch: First, no company can be relied upon to increase its common stock dividend by any future average annual amount; second, managements screw-up, new competitors arrive, new technologies threaten entrenched companies, etcetera and so forth, all can result in significantly reduced or eliminated dividends; third, the longer the period projected, the less confidence in any projection.

     

    All those risks become more likely for companies having high payout ratios and large investments in fixed plant and equipment. Even telecoms and utes have cut dividends (i.e., CTL, WIN, EXC, & FE, to name only a few recent cuts).

     

    Rich
    12 Aug 2014, 07:22 AM Reply Like
  • crazty4tennis
    , contributor
    Comments (1191) | Send Message
     
    Think positive! Bought T too and long T and enjoying the generous and consistent dividends the stock pays.
    12 Aug 2014, 10:09 AM Reply Like
  • Veritas1010
    , contributor
    Comments (3065) | Send Message
     
    What should be clear is that a million dollar investment by the membership of the "1%", (which are unfairly excoriated I believe, thank you Ayn Rand!), is a probably signal that T remains a long term buy and hold; I can't see any real surprise here.

     

    Sure, it's a 24/7 365 world meaning continual due diligence on all the points clearly outlined for example by richjoy, but certainly not limited to additional vital financial, economic, and political events.

     

    T is a good investment, (my opinion and a lot of other's too, which remember doesn't mean squat), again do your own dd - and bet on quality if you want a modicum of security for your money!
    12 Aug 2014, 04:33 PM Reply Like
  • richjoy403
    , contributor
    Comments (13338) | Send Message
     
    Veritas -- Agreed, and though I have already topped-up my full position in T, I'm not against topping-up again if it should dip below FV and the current yield rises close to 5.5%. No equity is without risks, but T's earnings are more predictable than most, and interest rates are not likely to cross even 3%, much less threaten 5%, anytime soon (and continue to defy those shouting otherwise these last 5 years). I've heard of a few people giving up cable service, but I don't know anyone who is considering giving up his smartphone or Internet.

     

    Rudester -- I only half-agree with your comment: I agree T is a relatively safe investment...but agreeing T is safe, also suggests I must disagree on your theory a wealthy director would only invest $1 million in T because he believes his investment will "grow substantially in short order"...

     

    IMO, your 'grow substantially' theory is counter to the principle of risk/reward...as a rule, "safe" investments do not provide high rewards in the short-term. I also doubt there is are any factors affecting T that are not priced-in (Of course there are exceptions, and I'd much the long-shot you are correct.)

     

    I don't expect all 50+ companies in my portfolio to all be pulling an empty wagon at the same time...rather, some are resting inside the wagon while others pull. T, VZ, the utes, healthcare, and energy, have all taken their turns pulling in the past, and I expect they are capable of doing so again (e.g., if my other holdings tire of pulling, or suffer from any of several worldwide negative possibilities, or we have ordinary sector rotation).

     

    For the last 3 months to date, INTC, KMI, and MSFT are pulling the hardest, having total returns of 32% to 13% (vs the market's 5%); whereas GSK, MCD, and EMR are not only resting in the wagon, but near comatose, having returned -14 to -5%. (T and VZ are in the wagon, having TRs of -4% and 3%).

     

    Rich
    [Note also T's dividend comes up for annual BoD review in December; a 2 cent increase would be a 4.3% DGR.]
    17 Aug 2014, 12:40 PM Reply Like
  • seduque
    , contributor
    Comment (1) | Send Message
     
    Can you smell REIT?
    16 Aug 2014, 11:40 AM Reply Like
  • Yankeeworld3
    , contributor
    Comments (111) | Send Message
     
    No REIT in the near term. I'm betting he's confident the DTV deal will get approved. After that, T will be just as much a cable company as they are a wireless right now.
    17 Aug 2014, 08:57 AM Reply Like
  • richjoy403
    , contributor
    Comments (13338) | Send Message
     
    This talk of T going the REIT route is only a kneejerk speculation relating to last month's REIT announcement by WIN.

     

    To 'smell REIT' conversion at T is a very long stretch, as WIN and T have are very different situations...according to the WSJ (7-31), for either T or VZ to transfer assets to a REIT could trigger a significant pension liability, and also leave key assets attractively priced to where they may be acquired by someone else. IOW, WIN is using the REIT to make the best of a bad situation--that doesn't make it a good idea for everybody.

     

    OTOH, the WSJ offers WIN's move could pressure the remaining troubled telecoms (FTR and CTL) to feel compelled to follow.

     

    Rich
    17 Aug 2014, 09:12 AM Reply Like
  • Veritas1010
    , contributor
    Comments (3065) | Send Message
     
    If my humble two-bits are worth anything richjoy you've nailed it again.

     

    The REIT conversation is, to put it politely, a lot of "swamp gas".

     

    The liabilities that T would assume just having dealt with its long term pension obligations makes zero sense at the moment. T and WIN may share in part the same industrial focus, but stretching similarities is a waste of good effort. For WIN, one can see the pluses - not so for T or VZ.
    17 Aug 2014, 10:14 AM Reply Like
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